Senator BIRMINGHAM (4:31 PM)
—I welcome the opportunity to comment on the Renewable Energy (Electricity) Amendment Bill 2009 and the Renewable Energy (Electricity) (Charge) Amendment Bill 2009. I am pleased that the government has finally brought these bills to the Senate for consideration. The primary bill aims to set in place a renewable energy target of 20 per cent by 2020. It will also enable the government to introduce a new solar rebate scheme based on renewable energy certificates that come with small energy units such as solar PV systems. The legislation progressively increases the 9,500 gigawatt hour annual mandatory renewable energy target to a 45,000 gigawatt hour mandatory renewable energy target, to be reached by the year 2020. The coalition parties support this objective, but I emphasise to the government as we enter this debate that this is not a blank cheque. We come to this debate with conditions and with the hope to be able to negotiate a satisfactory outcome to ensure and guarantee the passage of these bills.

The bills also replace the solar rebate of $8,000, which the coalition introduced in government, with the solar credit scheme. It will issue RETs to installers of PV systems of 1½ kilowatts or less and will ensure a trading scheme that provides some form of rebate—though not as generous as the previous scheme, I note—for solar panel installations. Under the bills, wholesale purchasers of electricity or liable parties are required to meet a share of the renewable energy target in proportion to their share of the national wholesale electricity market. Those who do not meet the target will face financial penalties.

As I said, the coalition welcomes the opportunity to debate these bills and hopes—with the government’s cooperation—to see their smooth passage through the Senate. We do so because our vision from this side of the chamber is for a clean energy economy. We believe that Australia has great capacity to transform its energy base and in doing so to provide for a clean energy future for all Australians, by using the great mix of technologies that are available to Australia and that are continually being advanced and developed.

In my own state—and, indeed, Mr Acting Deputy President Bernardi, in your own state too—of South Australia there remains great potential for the growth of clean energy, great potential in geothermal, great potential in solar, great potential that is already being recognised in wind, great potential around all parts of Australia for wave and tidal energy and great potential for the development of clean coal opportunities and carbon sequestration opportunities—not just through carbon capture and storage but through new developments in fields like algae, like the opportunity to capture carbon and to store and use it not just in a carbon capture manner but for agricultural benefit in the long term as well. We recognise all of these opportunities, but in particular we wish to see the step towards a clean energy economy taken but taken in a manner that actually preserves Australia’s interests—that is, Australia’s economic interests and the interests of Australian industry, households, farmers and the entire Australian community.

It was the coalition which first introduced Australia’s mandatory renewable energy target. It was one of the pioneering steps that the Howard government took in relation to climate change policy that, thanks to the politics pursued by those on the other side of the chamber, have been largely ignored or rewritten in history. Nonetheless, at the time the Howard government brought in the 9,500 gigawatt hour target which, taking account of already existing renewable energies in Australia, provided for an almost 10 per cent renewable energy target. We moved in the last phase of our government to support a 15 per cent clean energy target. As was the case during the last campaign, when Mr Rudd—as he did on the ETS, by trying in a failed gesture to bring its commencement date forward—sought to make a gesture of one-upmanship, as he liked to do time and again, and raise it to a 20 per cent target we indicated support for the principle of that 20 per cent target. Having done that at the last election, we are frankly gobsmacked that it took the government so long to get its house in order and to bring this legislation to the parliament and that it decided to scramble it up with its far more controversial ETS package and, along the way, stuffed around the renewable energy sector so comprehensively.

I have spoken many times in this place about the damage that is being done to the solar industry thanks to the approach of the Rudd government. We saw last year on budget night the solar industry surprised with a means testing on the $8,000 solar rebate. There was no consultation. There was no consideration by the government of the impact of this rebate on the solar industry, particularly of the impact it would have on the effectiveness of the rebate to achieve the maximum possible generation of electricity.

By excluding households with a gross income above $100,000, the government ensured that only small solar systems were installed. We were told—it was witnessed and evidenced—through the various inquiries undertaken in the Senate about numerous instances of this and we saw the long-term average size of solar systems shrinking because of the government’s means testing. Not only did they persevere with their ridiculous means testing; but on 9 June this year they scrapped the solar panel rebate prematurely. Having given countless assurances to the industry that there would be a smooth transition from the rebate to their solar credits arrangement, they then up and scrapped the rebate without having introduced into this parliament the legislation for this renewable energy target and for the solar credits arrangement at all. They left the solar industry hanging out there on a limb with one program abolished and the other without even the legislation in this place. One wonders what the government were thinking when they decided to both drag their heels in regard to this legislation and scrap the previous legislation in the manner in which they did.

Then, just a few days later, on 22 June at 8.30 am, the government, again without any warning to industry, scrapped a second renewable energy incentive scheme. This time, it was the Renewable Remote Power Generation program. This was a program that helped families, businesses and not-for- profit organisations who were not connected to the power grid to install solar, wind or other renewable energy units. This was a clever program because the only alternative that those people in remote and rural settings had was to use diesel power generation.

So the government had a longstanding, well-supported and well-taken-up program which the Howard government had put in place. Through it, people who did not have access to the power grid, instead of installing diesel units, installed solar units or other clean energy units with a subsidy from the government and support from the government. But no, again, this was scrapped pre-emptively on 22 June and, as a consequence, we see the solar industry sitting in limbo without a rebate for those off-grid systems, without a rebate for those on-grid systems and with nothing coming out of the solar credit system yet because the government has dragged its heels.

We do welcome very warmly the decision of the government to bring this forward, and not just to bring it forward but also to decouple it from the ETS. Not only did the Rudd government delay the introduction of their renewable energy target, which they knew from day one in government was their policy and their plan, but they also tied the legislation, this renewable energy target, to their emissions trading scheme for political motives. In a sense, they took their own legislation hostage. They said, ‘You can’t have this without that; you cannot have the RET without the ETS.’ It was a maddening decision by the government, and you have to wonder why on earth they decided to inflict such pain on the renewable energy sector—such uncertainty on the many businesses operating in that sector and such uncertainty on the many households that have tried to achieve and to take up renewable energy options. The linking of these schemes was unnecessary; nobody supported it, and you have to question why they did it. Indeed, the Clean Energy Council, at the height of the scrapping of the rebate programs by the government back on 16 June, said:

Any political tricky manoeuvre to hold the legislation up now will simply end up being a remarkable own goal.

Well, an own goal it has been proven to be, of course. With the defeat last week of the ETS legislation, the government has agreed, at long last, to decouple these bills—

Senator BIRMINGHAM
—and to do exactly what the coalition asked for from day 1. Senator Williams makes a valuable interjection: ‘Some of it.’ I will come to some of our foreshadowed amendments very soon that are important, as I said, to the passage of these bills. I re-emphasise that our support for the target and for these bills is not a blank cheque. Indeed, the coalition will seek a number of amendments to these bills. We are not satisfied with what has passed through the House of Representatives. I acknowledge the good work of Mr Hunt, Mr Macfarlane, Mr Robb and others on the coalition side in the other place in negotiating with the government to achieve concessions thus far to ensure that we have a system in place that both sides can and will support. But we are not satisfied with what passed the House of Representatives and we expect further changes during this debate in the Senate.

We will firstly, as Senator Williams alluded to, seek a full decoupling of the renewable energy target from the flawed emissions trading scheme that was voted down by the Senate just last week. We have been successful in securing the principle of decoupling. Certainly, if you listened to the language of the minister or, in particular, the Prime Minister on this matter, you would be led to believe that total decoupling had occurred, but it has not entirely happened. In particular, it has not happened for key affected industries. We believe that the framework of compensation and qualification under the ETS should be replicated but decoupled so that the start date for that compensation framework will be 1 January, irrespective of whether the ETS has been passed. That must occur for all affected industries.

We seek coverage of the aluminium sector for both its existing MRET and its expanded renewable energy target liabilities to the 90 per cent already offered by the government for the latter. At this stage we are not willing to accept the idea that the government limit its compensation in this sector in narrowly defined ways. We want to preserve and protect, as we have said all along, Australian jobs. That has been a priority of the coalition, along with ensuring the growth of renewable energy in Australia. We do so recognising the trade exposed nature of industries like this sector and the reality that, without this type of protection, we will simply see such industries close down in Australia, with jobs and the industries moving offshore to countries with less clean regulations than Australia. We will see the leakage of carbon emissions to those countries for no environmental benefit, with possibly even worse outcomes—yet to the economic detriment of Australia. So we are pushing hard and we expect the government to continue to negotiate in good faith on these issues, as we acknowledge they have done to date in earlier discussions and we hope that will continue behind closed doors and in the committee stage here.

We will also be seeking amendments regarding food processing to ensure that that sector is categorised for assistance under the renewable energy target as well. Protecting Australia’s food security is something that all members of the coalition have stood up for for a long time. We did so in the water debate and we will do so in this debate as well, because in the end Australia has a valuable role to play in food security not just for our country but also for the rest of the world.

The coalition will also seek to remove a loophole in relation to the multiplication of RECs for industrial heat pumps. We will also move that a portion of the RET be banded and reserved for emerging renewable technologies such as baseload solar, geothermal, wave, tidal and biomass. We will seek that 8,875 gigawatt hours or 25 per cent of the additional 35,500 gigawatt hours of renewable energy be reserved for these sectors. We do so in response to lobbying from the clean energy sector and from many of the parties involved in this, and because we recognise the importance of ensuring that this target is not just about clean energy but also about growing Australia’s capacity in the clean energy sector.

Growing our capacity does not just mean putting in place a mechanism that encourages further proliferation of the already well-developed and cheap wind opportunities that may exist—cheap by comparison with some of the others at this point. It also means ensuring that Australia, if it is to have a renewable energy framework, actually develops key baseload capacity. We want to make sure that the renewable energy target delivers on baseload potential for Australia’s future—not just the technologies that provide, potentially, additional energy at peak level but cannot be relied upon for that all-important baseload potential.

We have already been successful in securing amendments that recognise renewable gas or waste coalmine gas as a zero-emission source of energy, as it is in the United States and Germany. We are happy that the government has accepted that. We believe this will save some 400 jobs in the sector, but we believe the government should consider extending this support to 2030, not just to 2020.

I note, again as a South Australian senator, the enormous potential role that the gas industry can play in also reducing our emissions over time. Natural gas can meet future baseload power generation requirements for Australia. It can be a key partner to this renewable energy technology. Where we have technologies, like wind, that may not be reliable, gas has the potential to be able to be wound up or wound down in accordance with the power generated by some of those other technologies, so it can complement these sectors. I know that companies like Santos, one of South Australia’s major companies, have been working very hard to explain this potential to the government.

In conclusion, I emphasise the coalition’s commitment to a clean energy future for Australia and to continuing to work with the government through the Senate process, in good faith, to achieve the changes that I have outlined—changes that we believe will secure Australia’s future and our economic position and protect Australia jobs while at the same time giving Australia a world-leading position in developing renewable energy technologies.

As I emphasised, our support is not a blank cheque. Whilst we will support the second reading of the bill at the conclusion of this stage of the debate, we do reserve our position on the third reading depending on the progress of the amendments that I have outlined today and amendments in the committee stage. But we welcome the fact that this bill is before us and we look forward to working in a cooperative manner with the government to, hopefully, ensure that Australia has a bright, clean energy future ahead of it.